Two basic types of base metal sulphide mineralization (477,572 tonnes grading
1.67% Cu; 1967-72 are recognized at the Potter Mine, subseafloor
replacement and seafloor sulphide. In both types the predominant sulphide
mineral is pyrrhotite with lesser sphalerite and calcopyrite. The deepest
massive sulphide intersection encountered during Millstream Mines Ltd.'s
1997-98 drill program returned values of 5.34% Cu, 3.24% Zn over 7.75 metres.
The mineralization is open at depth.

Subseafloor sulphide consists of disseminated and semi-massive sulphide
mineralization (10-80% sulphides) within the matrix of hyaloclastite. Mineralization
ranges from disseminated sulphide, often replacing an earlier carbonate
cement, to semi-massive sulphide where black, chloritized, wispy
hyaloclastite shards occur within a massive sulphide matrix. The delicate,
wispy nature of chloritized hyaloclastite shards within sulphide is not
a primary feature but a product of sulphide replacement along shard margins
and perlitic cracks. Although textural and field evidence is limited to
a few cross cutting relationships it is tentatively interpreted
that early formed pyrrhotite and sphalerite were replaced by chalcopyrite.
This paragenetic sequence is typical of many volcanic-associated massive
sulphide deposits, and by analogy, may reflect original temperature gradients
and sequential replacement during formation of the sulphide lenses where
an early, "lower temperature" pyrrhotite/sphalerite mineralization was
progressively replaced by "higher temperature" chalcopyrite.

Thus, the hyaloclastite acted as a trap for sulphide mineralization.
Thc semi-massive sulphide lenses are interpreted to have grown below the
seafloor by the precipitation of sulphides within the permeable hyaloclastite
matrix and by replacement of the matrix and, to some extent the hyaloclastite
shards. Subseafloor replacement is a mechanism common, but not restricted
to, the formation of many large volcanic-associated massive sulphide deposits.

The former Potter mine (477,572 tonnes grading 1.67% Cu, 1967-72) is located
within the east-southeast trending Archean (2714 Ma) belt of mafic to ultramafic
komatiitic to tholeiitic volcanic and intrusive rocks referred
to as the Kidd-Munro Assemblage. In the mine area, the volcanic succession
is divisible into three lithostratigraphic and chemostratigraphic units
occurring, from the oldest to youngest, as follows: 1) a Lower komatiitic
ultramafic flow sequence; 2) a Middle tholeiitic basalt hyaloclastite sequence,
including comagmatic peperitic basalt sills, argillaceous sediments and
komatiitic flows; and 3) an Upper komatiitic ultramafic flow sequence.
Strata strike easterly, dip steeply and face north at 85 degrees, and lie
on the south flank of the regional west plunging McCool Hill synclinal
structure. The Center Hill ultramafic to mafic layered igneous complex,
a part or the Munro Sill, has intruded into the volcanic pile southeast
of the Potter mine. Sulphide mineralization at the former Potter mine,
as well as sulphide mineralization encountered during Millstream Mines
Ltd.'s recent 1998 deep drilling are hosted within "hyaloclastite"
of the Middle unit. The sulphide mineralization infills a primary
topographic depression -graben- that immediately flanks the western side
of a tholeiitic eruptive centre (fissure), within the flat komatiitic lava
plain. Sulphides, predominantly pyrrhotite with lesser amounts
of chalcopyrite and sphalerite, occur as: 1) a seafloor massive
sulphide lenses associated with carbonaceous argillite; and 2) as semi-massive
to massive replacement deposits that formed in a subseafloor environment
within the hyaloclastite. The deepest massive sulphide intersection to
date occurs at a vertical depth of 605 meters in DDH S-98-01 and returned
5.34% Cu, 3.24% Zn over 7.75 meters and is open at depth. The stacked multi-lens
nature of the sulphide mineralization suggests a relatively long-lived
hydrothermal event was active throughout deposition of the hyaloclastite.
Alteration consists of palagonitization, carbonitization, and silicification,
and chloritization. The semi-massive replacement sulphides, and the massive
sulphide lenses, are enveloped by semi-conformable black chlorite alteration
that is characterized by a depletion in SiO2, Na2O,
CaO, and MgO and an enrichment of Fe2O3 and base
metals. The mineralization and alteration encountered to date is largely
stratabound and may represent the fringe of a larger hydrothermal system
located down plunge, within the inferred subsidence structure.